City Union Bank surges after steady Q2 performance

The bank's total income rose 15% year-on-year to Rs 1,912 crore in Q2 FY26 from Rs 1,660 crore in Q2 FY25, supported by a 15% increase in interest income to Rs 1,653 crore and a 14% rise in non-interest income to Rs 259 crore. Net interest income (NII) stood at Rs 667 crore, up 14% year-on-year. The bank's net interest margin (NIM) rose to 3.63% in Q2 FY26 from 3.54% in Q1 FY26, aided by faster deposit repricing and migration of gold loans to fixed rates.

Operating profit grew 10% YoY to Rs 471 crore, while profit after tax (PAT) rose 15% YoY to Rs 329 crore from Rs 285 crore in the same period last year. Operating expenses climbed 20% YoY to Rs 455 crore in Q2 FY26.

The bank's total deposits grew 21% to Rs 69,486 crore, with the CASA ratio at 27%. The cost of deposits eased slightly to 5.71% from 5.75% a year ago.

On the lending side, advances increased 18% to Rs 57,561 crore, with the average credit-to-deposit ratio at 83%. The yield on advances eased marginally to 9.66% in Q2 FY26 as against 9.81% in Q2 FY25.

Asset quality strengthened, with the gross non-performing assets (NPAs) at Rs 1,393 crore as on September 2025 as against Rs 1,617 crore as on June 2025 and Rs 1,726 crore as on September 2024.

The ratio of gross NPAs to gross advances stood at 2.42% as on September 2025 as against 2.99% as on June 2025 and 3.54% as on September 2024. The ratio of net NPAs to net advances stood at 0.90% as on September 2025 as against 1.20% as on June 2025 and 1.62% as on September 2024. The provision coverage ratio stood at 82% including technical write-offs.

Return on assets (ROA) improved to 1.59% as against 1.55% in Q1 FY26. The capital adequacy ratio (CAR) remained robust at 21.68%, with Tier-I capital at 20.71%, well above regulatory norms.

City Union Bank is an old sector private sector bank with 889 branches across 18 states and 4 Union territories. It is a scheduled commercial Bank regulated by the Reserve Bank of India. The bank positioned itself as a banker to SMEs, Agri and Traders apart from all other banking activities.

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